MARKET WATCH: Cautious hope for budget lifts oil, gas prices

Front-month crude edged up 0.5% Dec. 17 on the New York market on cautious optimism for negotiation of a US budget. Natural gas climbed 1.3% on forecasts for colder weather during Christmas week, ending a 7-session losing streak. 

There was “a veritable Santa rally” in US commodity and equity markets with the Dow Jones Industrial Average up 100 points to “within 400 points of its 52-week high set in October,” said analysts in the Houston office of Raymond James & Associates Inc.

That followed indications President Barak Obama and House Speaker John Boehner had moved from the previous budget deadlock. The Oil Service Index and the SIG Oil Exploration & Production Index moved higher, up 1.1% and 1.2%, respectively.

Although both Democrats and Republicans indicated some concessions on the proposed budget, Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said, “Any optimism is guarded, as is evident in gold’s struggle to make significant gains away from the $1,700/oz anchor.”

 

Energy prices

The January contract for benchmark US sweet, light crudes rose 47¢ to $87.20/bbl Dec. 17 on the New York Mercantile Exchange. The February contract increased 42¢ to $87.67/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 47¢ to $87.20 in step with the front-month futures contract.

Heating oil for January delivery declined 2.44¢ to $2.96/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dipped 0.75¢ to $2.65/gal.

The January natural gas contract recouped 4.4¢ to $3.36/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., regained 6¢ to $3.21/gal.

In London, the new February front-month IPE contract for North Sea Brent decreased 54¢ to $107.64/bbl. Gas oil for January lost 50¢ to $922.25/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up 30¢ to $106.07/bbl.

Contact Sam Fletcher at samf@ogjonline.com

 

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